Export Policy on Strategic Minerals Falls Outside Competition Law: NCLAT Delhi
Case Reference
Beach Mineral Producers Association Vs Government of India (NCLAT Delhi)
Background and Context
This matter arose from an appeal filed before the National Company Law Appellate Tribunal (NCLAT), Delhi, challenging an order passed by the Competition Commission of India (CCI) on 25.07.2019, wherein the CCI had closed the proceedings that were initiated pursuant to Section 19(1)(a) of the Competition Act, 2002.
The crux of the dispute centered on allegations of abuse of dominant position under Section 4 of the Competition Act, 2002, directed against the Directorate General of Foreign Trade (DGFT), its Director General, and a public sector undertaking (PSU) involved in the processing of beach sand minerals (BSMs).
Parties Involved
The Informants
Two parties jointly filed the information before the CCI:
- Informant-1 – Beach Mineral Producers Association, a society registered under the Societies Registration Act, 1860, formed to protect the interests of miners engaged in mining and processing of beach sand minerals, particularly in Tamil Nadu.
- Informant-2 – Mr. Velmurugan, proprietor of M/s Phoenix Agency, a dealer and trader in BSMs holding an Importer Exporter Code (IEC) issued by the Madurai regional office of DGFT in May 2016.
The Opposite Parties
- OP-1 – Directorate General of Foreign Trade (DGFT), an attached office of the Ministry of Commerce and Industry, responsible for formulating and implementing the Foreign Trade Policy (FTP) of India.
- OP-2 – Director General, DGFT, who heads OP-1.
- OP-3 – Indian Rare Earths Limited, a wholly owned PSU under the administrative control of the Department of Atomic Energy (DAE), Government of India, with mineral processing units in Tamil Nadu, Kerala, and Odisha.
Nature of Beach Sand Minerals and Their Strategic Significance
Beach sand deposits, commonly referred to as placer deposits, are found along the coastlines of five Indian states — Tamil Nadu, Kerala, Andhra Pradesh, Odisha, and Maharashtra. These deposits contain an array of associated minerals including ilmenite, rutile, garnet, monazite, zircon, sillimanite, and leucoxene.
Each of these minerals holds significant industrial and strategic value:
- Garnet – Used in manufacture of abrasives and as a key component in sand blasting.
- Rutile and Leucoxene – Utilized for creating welding flux.
- Zircon – Applied as a pigment in ceramics, refractories, and abrasives.
- Sillimanite – Used in the manufacture of refractories.
- Monazite – A thorium ore employed for strategic purposes and extraction of rare earth components.
BSMs hold applications in space, defence, and atomic energy sectors, which lends them their classification as atomic minerals under the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) and Prescribed Substances under the Atomic Energy Act, 1962.